Returning to Port — Project Update
We recently announced the depreciation of Galleon structured products and detailed that the team would do some R&D on whether we could remain in building within the niche given our current capacity & resources.
With our goal to always be as transparent, allowing for no ambiguity, the core contributing team has made the difficult decision not to pursue further ventures into developing structured products for reasons outlined in this article. Furthermore, with limited resourcing, we will be disbanding the full-time contributing team to Galleon and moving to part-time contributors within the DAO to deliver Cursed Pirates and beyond — we have a lot of passion for the brand and project and do not want to simply walk away but find a way to still build whilst being cognizant of our own personal liabilities.
I know this will come as a disappointment for the Galleon community as our core value proposition has been discontinued, and whilst the DAO, Doubloon & Cursed Pirates remain, it is the end of an era for us and a difficult one to process as we faced the reality that we could not continue ‘all-in’. We are incredibly proud of what we accomplished but ultimately we failed our goal of creating a sustainable path forward in the time we had despite our innovations and best intentions.
Below we’ll go through Galleon, its accomplishments within the space, headwinds that led to this decision, implications & Cursed Pirates.
The Formation of Galleon
Galleon was Founded by myself, or ‘Davy Jones’ to many, with a passion for utilising Set Protocol to create next-generation structured products. I leveraged relationships with the Set team from working at the company and extensive product knowledge to enter the niche and had always felt that Set Protocol had never received the praise and adoption it deserved. Galleon aimed to change that and we raised $1M in funding from crypto-native funds & angels to bootstrap a team and build the vision.
Accomplishments
– Narrative-based indices, such as SOLUNAVAX, combined with novel issuance contracts allowed traders to gain exposure to a popular, multichain basket of tokens utilising perpetual markets in one click. Unfortunately, this was shortly followed by the collapse of LUNA/UST and the product depreciated after a large initial engineering investment.
– The first recursively leveraged ETH staking product, which was composable with the rest of DeFi as an ERC20 token. We pioneered the ETH Max Yield Index (ETHMAXY), to widespread attention across the industry utilising Aave V2 & Lido to bring the product to market, a feat we are proud of.
– One of the first tokenised delta-neutral, ETH basis trading strategies in the form of Basis Yield ETH (BYE), built on the Optimism network utilising Perpetual Protocol V2.
– Created a strong, unique brand image and community for Galleon within the industry that is worlds apart from unimaginative fork style, low-effort project brands.
– Created an original NFT collection in Cursed Pirates (pending release) built in-house with a unique concept, and traits that were not simply a clone of another collection. Additionally designed a unique sub-DAO concept where Cursed Pirates and Galleon would be symbiotic with each other.
– Unreleased but deployed products in the form of a composable ETH/BTC Ratio trading strategy & a dynamically leveraged ETH token, both with flash issuance capabilities for “one-click” exposure.
Since inception, we had done frequent reflections on our product strategy regarding what was ‘too early’ or ‘too niche’, the reality being that we could have had a dozen products released in the same timeframe but just throwing products into the wind makes no sense in achieving the goals of the DAOs, which was to attract the highest amount of un-incentivised TVL within our product suite, therefore higher revenue and more sustainability within the DAO. The outcome of this was shifting away from narrative-based, index-style products and leaning into ETH-based strategy tokens which had always found the highest PMF and ‘stickiness’ within users.
Headwinds
Galleon was bootstrapped in February 2022, days before Russia invaded Ukraine, the FED started raising rates aggressively, the bear market took a firm grip on crypto as volume and liquidity started dwindling and of course, the multiple calamities within the industry itself regarding LUNA/UST & FTX causing widespread FUD and contagion in the space still felt today. Now, we do not excuse ourselves because of the risk-off environment we operated in, having the odds stacked against us was obvious compared to a project that started amidst the bull market, but when building investor products, it was certainly a persistent negative force on Galleon that we have recognised.
Additionally, the primary headwinds eluded to earlier that we face today that lead to the decision to step back from the niche of structured products are:
- Resourcing, our runway (ending Q2 2023) and now the lack of engineering talent do not give the timeline to research and develop new innovative products within the niche.
- Regulatory, the existing team is predominately based in the UK — we would want to be sure the DAO was defensible if using another infrastructure layer to build structured products.
- Well-capitalised, talented competition and the fast evolution of on-chain product strategies whilst the crypto market remains relatively flat in size means that it has been difficult to gain a competitive edge in the market, especially so as we wanted to attract capital organically and not use unsustainable incentives for mercenary capital.
Going Forward — Key Takeaways
- Galleon, the DAO will still be operational and we will be looking to open up the organisation to be more inclusive in how people can participate with the existing contributors if they want to partake in the development of Cursed Pirates and beyond. The DAO however will no longer be the exclusive focus of the team as the runway comes to a close.
- The DBL/WETH liquidity pool will remain completely unchanged in its provisions, we only may consider moving it to another protocol (e.g. Camelot instead of Uniswap on Arbitrum).
- Discord server structure and roles to be simplified around what we are actively developing, the community & of course, support.
- ETHMAXY & BYE product depreciation is now in effect as per our previous announcement on the matter, with maintenance ending on June 1st.
- Galleon websites, applications, bots & any other software are to be updated to reflect our new direction and situation.
Cursed Pirates Launch
Our NFT collection was originally intended to be a small, symbiotic part of the Galleon ecosystem, however now in light of the recent situation, our attention will be turned towards it as we head to the launch window and beyond, we love the unique art, theme & lore that we are building and have no intention of stopping regardless of the runway.
Here are some key details on the upcoming launch:
Website: cursedpirates.xyz
Twitter: twitter.com/cursedpirates
Community: discord.gg/galleondao
Whitelist & Distribution: Table
Minting Network: Arbitrum
Launch: Target April/May
Cost: Free
Collection Size: 5500
Final Remarks
Understandably, this is still not the announcement many want to be reading regarding the future of Galleon and I know there will be some who will not want to join us on the next leg of the journey as we fundamentally change the dynamics of the DAO and what our focus is on. That's fair, and I would like to thank you, the community and prior backers of Galleon for all the support and love that we have had since launching — it was one hell of a voyage, irrespective of the macro environment we worked within and I hope one day we can still create a success out of the Galleon brand and DAO.
On a personal note, without bloating this article — there is an enormous amount I have learnt from Galleon, unique to the past year building within the industry around structured products, tokenomics, regulation, incentives, organisational structures, governance structures and of course, the mental effects of operating under strain from a community of token holders. I look forward to sharing these experiences down the line in the hope it is of value to someone, and the best place to stay updated on that is Twitter.
Questions about anything within this article?
Twitter DM: https://twitter.com/andrew_eth
Discord: Davy Jones#0001
